EV manufacturers looking to decarbonize — and profit from it
As EV battery recycling becomes a necessity, can carmakers support sustainability — and save money?
The increasing demand for electric vehicles (EVs) is rapidly transforming the future of transportation.
According to a report by the International Energy Agency, battery demand for batteries is outpacing the growth of electric car sales in the United States, with recorded growth of around 80%. As the popularity of EVs continues to soar, the need for efficient battery recycling is becoming critical.
EV batteries contain valuable raw materials — such as aluminum, nickel, lithium and cobalt — and recycling them could boost the sustainability and robustness of both the automotive industry and supply chains. But creating a responsible and efficient method for electric vehicle battery recycling is both complex and expensive.
And yet, according to The Business Research Company, the EV battery recycling market size is expected to grow by around US$6 billion in 2027, causing original equipment manufacturers (OEMs) to take the opportunity to turn EV battery recycling into a new revenue stream.
OEMs have recognized the importance of sustainability and are actively embracing more eco-friendly practices.
By actively participating in EV battery recycling, OEMs can recover up to 98% of critical raw materials like aluminum, nickel, lithium and cobalt. This can help reduce the reliance on resource extraction and lower carbon emissions associated with new battery production.
The dedication of OEMs to a circular economy also aligns with the growing consumer demand for environmentally conscious products and services.
Apart from contributing to a more sustainable future, EV battery recycling could also provide OEMs with additional income streams.
McKinsey predicts that by 2025, each ton of battery material could be worth up to US$600. This growth coincides with the expansion of the global lithium-ion battery recycling market, which is projected to reach billions of dollars.
OEMs can take advantage of this opportunity to increase their profits by diversifying their revenue streams through the EV battery recycling market.
Investing in making a difference
The interest in repurposing EV batteries extends beyond original equipment manufacturers. Regulatory bodies in the European Union (EU) and the United States are providing incentives and regulations to further promote the recycling of EV batteries.
The European Parliament and the Council aim to make all batteries placed on the EU market more sustainable, circular and safe to support Europe's clean energy transition and independence from fuel imports.
In the US, the Inflation Reduction Act of 2022 is putting strong efforts toward lowering consumer costs and driving the global clean energy economy forward.
Initiatives from governmental institutions seek to improve EV battery recycling and make it more affordable to decrease the nation's reliance on mined materials.
EV battery recycling holds great potential for generating profits, and OEMs are using collaboration and innovation to maximize this potential.
By partnering with battery recyclers, OEMs can take advantage of their expertise and existing infrastructure, leading to a more efficient and cost-effective recycling process.
Investing in research and development can also improve recycling techniques, leading to greater profitability for recycling operations. By complying with regulations and building a positive reputation, OEMs can unlock the potential of the circular economy, leading to a sustainable future for EVs and a new source of income.
As the number of electric cars on the road becomes more commonplace, EV battery recycling is no longer just an environmental necessity but also a lucrative business opportunity.
By prioritizing responsible battery management and adopting a circular economy model, OEMs can help create a cleaner and greener transportation future that maximizes resource recovery, minimizes waste, and ensures a sustainable supply chain for electric vehicles.
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